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Insurance Companies Face Lawsuits Over Unscrupulous Practices

Legal disputes sometimes arise from dissatisfied customers of large, high-profile insurance companies. For example, Blue Cross Blue Shield of Michigan recently experienced a number of unhappy clients who pursued legal recourse. Over the past week, the business additionally faced another round of lawsuits with accusations of violating the Employee Retirement Income Service Act (ERISA).

A total of 30 federal lawsuits filed between August 9 and 11 allege that Blue Cross hatched a scheme to improve the company’s financial position. According to the suit, the supposed plot wanted to add surcharges to existing health plan fees. Following pushback and a loss of business for what became an unpopular move, Blue Cross concealed the markups from customers.

Michigan’s Blue Cross has been sued before. A 2014 decision by the U.S. Court of Appeals for the Sixth Circuit upheld a $6 million judgment over similar accusations. Since the decision, a total of 200 ERISA cases saw Blue Cross accused of levying hidden health plan fees.

The timing of the most recent spate of litigation arrives as a deadline looms. While not technically a statue of limitation, the district court held that the lawsuits are timely until at least August 12.

Regardless of when the filings occurred, the 30 most recent lawsuits are nearly identical to the allegations previously found valid by other courts, including the Sixth Circuit. Allowing plaintiffs to proceed past a formal statue of limitations is based on how effective the insurer was in concealing their acts. By being deviously detail-oriented, few noticed the tactics for many years.

Blue Cross was pursued by clients because of their own deeds in the form of hidden price hikes, and a flurry of client lawsuits.